8-7-13 4:01 PM EDT | Email Article

Ignite Restaurant Group (NASDAQ: IRG) today reported financial results for the second quarter ended July 1, 2013.

Highlights for the 13-week second quarter of 2013 were as follows:

  • Total revenues were $228.1 million, including $86.0 million associated with Macaroni Grill, which was acquired on April 9, 2013
  • On a comparable 13-week basis, system-wide comparable restaurant sales increased 0.7% at Joe’s Crab Shack and increased 6.4% at Brick House Tavern + Tap. Comparable sales decreased 7.4% at Macaroni Grill from the acquisition date through July 1, 2013
  • Net loss and net loss per share were $2.5 million and $0.10, respectively
  • Adjusted net income and adjusted net income per share (which are non-GAAP financial measures) were $1.0 million and $0.04, respectively
  • Three new Joe’s Crab Shack restaurants opened during the second quarter of 2013 and one Brick House Tavern + Tap was converted from a Joe’s

Beginning with the first quarter of fiscal 2013, the Company adjusted its quarterly reporting calendar to four 13-week operating periods. Previously, the first three quarters of the Company’s fiscal year consisted of 12 weeks and the fourth quarter consisted of 16 weeks. As a result, financial results for the 13-week quarter ended July 1, 2013 may not be directly comparable to those of the corresponding 12-week quarter ended June 18, 2012. However, we are able to recast revenues for the second quarter of 2012 on a 13-week basis.

Ray Blanchette, CEO of Ignite Restaurant Group, stated, “Consistent with our pre-release, we’re pleased with the sales improvement at Joe’s and the continued sales growth at Brick House. However, necessary spending increases associated with returning the Mac Grill units to appropriate staffing levels and an enhanced media buy significantly impacted our second quarter operating results. Our vision for the potential of the Macaroni Grill brand and its long term benefit to the Ignite business remains unchanged. We are encouraged by Macaroni Grill’s improving sales trends over the past 4 months and are determined to demonstrate further progress across the entire P&L as the year progresses.”

Review of Second Quarter 2013 Operating Results

Total revenues were $228.1 million in the 13-week second quarter of 2013. Total revenues in the 12-week second quarter of 2012 were $119.9 million. Adjusting 2012 revenues to a comparable 13-week quarterly reporting period, total revenues in the second quarter of 2013 increased approximately $95.2 million, or 71.6%. The increase was driven by the acquisition of the Macaroni Grill restaurants, new restaurant development and a 1.3% increase in comparable restaurant sales associated with the Company’s legacy concepts.

  • Revenues at Joe’s Crab Shack were $129.6 million during the second quarter of 2013 versus $121.1 million in the comparable 13 weeks of the prior year. Comparable restaurant sales at Joe’s Crab Shack increased 0.7%.
  • Revenues at Brick House Tavern + Tap were $12.5 million in the second quarter of 2013 compared to $11.9 million in the comparable 13 weeks of the prior year. Comparable restaurant sales at Brick House Tavern + Tap increased 6.4%.
  • Revenues at Macaroni Grill were $86.0 million, which included $751 thousand in royalty income. Comparable restaurant sales at Macaroni Grill decreased 7.4% from April 9, 2013 (date of acquisition) through July 1, 2013 versus the comparable period of the prior year.

Net loss for the 13-week second quarter of 2013 was $2.5 million, or $0.10 per diluted share. The Company’s net loss for the second quarter of 2013 included approximately $5.3 million of primarily acquisition related and labor related transition costs in connection with the acquisition of Romano’s Macaroni Grill. Excluding the impact of these items, adjusted net income and adjusted net income per diluted share (which are non-GAAP financial measures) were $1.0 million and $0.04, respectively, in the 13-week second quarter of 2013. Net income in the 12-week second quarter of 2012 was $5.5 million, or $0.25 per diluted share. Adjusting primarily for IPO-related costs incurred in the second quarter of 2012 and for the increase in weighted-average shares outstanding as a result of the IPO, adjusted net income and adjusted pro forma net income per diluted share in the 12-week second quarter of 2012 was $7.1 million and $0.28, respectively. A reconciliation between GAAP net income and adjusted net income is included in the accompanying financial data.

Development

During the second quarter of 2013, the Company opened three Joe’s Crab Shack restaurants – in Deptford, NJ, West Nyack, NY and Riverhead, NY - and one Brick House Tavern + Tap in Parker, CO that was converted from a Joe’s. Subsequent to the end of the current quarter, one additional Joe’s Crab Shack restaurant was opened in Harlem, NY. As of August 7, 2013, the Company has opened seven restaurants in fiscal 2013. For the remainder of the fiscal year, we expect to open as many as seven more restaurants, four of which will be new Joe’s Crab Shack restaurants, one new Brick House Tavern + Tap and converting as many as two existing restaurants to Brick House Tavern + Tap.

Conference Call

We will host a conference call to discuss our second quarter financial results today at 5:00 PM Eastern Standard Time. Hosting the call will be Ray Blanchette, Chief Executive Officer, and Michael Dixon, President and Chief Financial Officer. The conference call can be accessed live over the phone by dialing 888-271-8586 or for international callers by dialing 913-312-1469. A replay will be available one hour after the call and can be accessed by dialing 877-870-5176 or 858-384-5517 for international callers; the password is 8218938. The replay will be available until August 14, 2013. The call will also be webcast live from the Company's website at www.igniterestaurants.com under the investor relations section.

About Ignite Restaurant Group

At the end of the second quarter 2013, Ignite Restaurant Group, Inc. owned and operated 134 Joe's Crab Shacks, 186 Romano's Macaroni Grills and 16 Brick House Tavern + Taps. Ignite also franchised five Romano's Macaroni Grills in the United States and 19 units throughout the U.S. territories and foreign countries. Each brand offers a variety of high-quality, chef-inspired food and beverages in a distinctive, casual, high-energy atmosphere.

Cautionary Note Regarding Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company’s control. The Company cautions you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events and results may differ materially from those made in or suggested by the forward-looking information contained in this press release. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Examples of forward-looking statements and beliefs in this press release include those related to our planned new restaurant openings and conversions, our vision for the Romano’s Macaroni Grill Concept, and our efforts to demonstrate progress in improving our results of operations during the remainder of the year.

A number of important factors could cause actual events and results to differ materially from those contained in or implied by the forward-looking statements included in this press release, including the risk factors discussed in the Company’s Form 10-K for the year ended December 31, 2012 as supplemented by the risk factors included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended April 1, 2013 (which can both be found at the SEC’s website www.sec.gov) and each such risk factor is specifically incorporated into this press release. Any forward-looking information presented herein is made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Results of Operations

With the change in our fiscal quarters, as noted above, the second quarter and year-to-date period of 2013 represent 13 and 26 weeks of activity, respectively, while the second quarter and year-to-date period of 2012 represent only 12 and 24 weeks of activity, respectively. As such, the quarter and year-to-date periods of each year are not comparable. We did not believe it was practicable to recast the prior year quarter and year-to-date periods to 13 and 26 weeks, respectively. The only financial information that we were able to recast on a 13-week basis for the second quarter of 2012 and 26-week basis for the year-to-date period was revenues. We are also able to report restaurant operating weeks and change in comparable restaurant sales for the comparable 13-week and 26-week periods of fiscal year 2012. We believe it is impracticable to recast other financial information because we do not have weekly cutoff procedures that would allow us to distribute expenses or cash flows to the appropriate periods in order to report the prior year on a 13-week and 26-week basis.

The following table presents the consolidated statement of operations for the thirteen and twenty-six weeks ended July 1, 2013 and the twelve and twenty-four weeks ended June 18, 2012.

Consolidated Statements of Operations  

Thirteen Weeks
Ended

July 1, 2013

 

Twelve Weeks
Ended

June 18, 2012

      (In thousands, except percent and per share data)
     
Revenues $ 228,132 100.0 % $ 119,886 100.0 %
Costs and expenses
Restaurant operating costs and expenses
Cost of sales 66,765 29.3 % 37,172 31.0 %
Labor expenses 71,465 31.3 % 31,970 26.7 %
Occupancy expenses 18,896 8.3 % 7,717 6.4 %
Other operating expenses 48,039 21.1 % 19,655 16.4 %
General and administrative 16,611 7.3 % 8,044 6.7 %
Depreciation and amortization 7,356 3.2 % 4,200 3.5 %
Pre-opening costs 1,477 0.6 % 1,430 1.2 %
Restaurant impairments and closures 14 0.0 % 57 0.0 %
Loss on disposal of property and equipment   197   0.1   %   171   0.1   %
Total costs and expenses   230,820   101.2   %   110,416   92.1   %
Income (loss) from operations (2,688 ) (1.2 ) % 9,470 7.9 %
Interest expense, net (1,741 ) (0.8 ) % (2,768 ) (2.3 ) %
Gain on insurance settlements   -   0.0   %   217   0.2   %
Income (loss) before income taxes (4,429 ) (1.9 ) % 6,919 5.8 %
Income tax expense (benefit)   (1,967 ) (0.9 ) %   1,433   1.2   %
Net income (loss) $ (2,462 ) (1.1 ) % $ 5,486   4.6   %
 
Basic and diluted net income (loss) per share data:
Net income (loss) per share
Basic and diluted $ (0.10 ) $ 0.25
Weighted average shares outstanding
Basic 25,624 22,136
Diluted 25,624 22,137
Consolidated Statements of Operations  

Twenty-Six Weeks
Ended

July 1, 2013

 

Twenty-Four Weeks

Ended
June 18, 2012

      (In thousands, except percent and per share data)
     
Revenues $ 346,372 100.0 % $ 223,316 100.0 %
Costs and expenses
Restaurant operating costs and expenses
Cost of sales 103,086 29.8 % 70,087 31.4 %
Labor expenses 103,372 29.8 % 60,017 26.9 %
Occupancy expenses 27,450 7.9 % 15,249 6.8 %
Other operating expenses 69,843 20.2 % 38,223 17.1 %
General and administrative 26,902 7.8 % 14,267 6.4 %
Depreciation and amortization 12,169 3.5 % 8,149 3.6 %
Pre-opening costs 2,568 0.7 % 2,958 1.3 %
Restaurant impairments and closures 31 0.0 % 106 0.0 %
Loss on disposal of property and equipment 392 0.1 % 260 0.1 %
Total costs and expenses 345,813 99.8 % 209,316 93.7 %
Income from operations 559 0.2 % 14,000 6.3 %
Interest expense, net (2,136) (0.6) % (4,765) (2.1) %
Gain on insurance settlements 300 0.1 % 217 0.1 %
Income (loss) before income taxes (1,277) (0.4) % 9,452 4.2 %
Income tax expense (benefit) (1,000) (0.3) % 2,081 0.9 %
Net income (loss) $ (277) (0.1) % $ 7,371 3.3 %
 
Basic and diluted net income (loss) per share data:
Net income (loss) per share
Basic and diluted $ (0.01) $ 0.36
Weighted average shares outstanding
Basic 25,624 20,666
Diluted 25,624 20,666
Selected Consolidated Balance Sheet Information  

July 1,

2013

 

December 31,

2012

    (In thousands)
Cash and cash equivalents $ 1,136 $ 6,929
Total assets 330,284 201,438
Long term debt (including current portion) 105,000 45,000
Total liabilities 223,687 95,221
Stockholders' equity 106,597 106,217
       

Thirteen Weeks Ended

 

Twelve Weeks Ended

 

Twenty-Six Weeks Ended

Twenty-Four
Weeks Ended

July 1, 2013June 18, 2012July 1, 2013June 18, 2012
 
Selected Other Data:
Restaurants opened during the period 4 5 6 8
Number of restaurants open (end of period):
Joe's Crab Shack 134 127 134 127
Brick House Tavern + Tap 16 16 16 16
Romano's Macaroni Grill   186     -     186     -  
Total restaurants 336 143 336 143
Restaurant operating weeks(1)
Joe's Crab Shack 1,727 1,491 3,404 2,937
Brick House Tavern + Tap 201 192 396 384
Romano's Macaroni Grill(2) 2,232 - 2,232 -
Average weekly sales (in thousands)
Joe's Crab Shack $ 75 $ 73 $ 69 $ 69
Brick House Tavern + Tap $ 62 $ 57 $ 61 $ 56
Romano's Macaroni Grill(2) $ 38 $ 38

Change in comparable restaurant

sales(3)

Joe's Crab Shack 0.7 % 3.1 % (0.5 %) 4.2 %
Brick House Tavern + Tap 6.4 % 1.3 % 5.2 % 1.6 %
Romano's Macaroni Grill(2) (7.4 %) (7.4 %)
Total (2.5 %) 3.0 % (2.2 %) 4.0 %
 

(1) On a thirteen week comparable quarter for 2012, restaurant operating weeks would have been 1,622 and 208 for the thirteen weeks ended July 2, 2012, and 3,191 and 416 for the twenty-six weeks ended July 2, 2012 for Joe's Crab Shack and Brick House Tavern + Tap, respectively.

(2) Activity for Romano's Macaroni Grill commenced from the acquisition date of April 9, 2013.

(3) Comparable restaurant sales for the second quarter of 2013 compares the thirteen weeks ended July 1, 2013 to the comparable thirteen week period of 2012.

Reconciliation of Non-GAAP Results to GAAP Results

The Company provided detailed explanations of these non-GAAP financial measures, including a discussion of the usefulness and purpose of each measure, in its Form 8-K filed with the Securities and Exchange Commission on August 7, 2013.

      Thirteen Weeks EndedTwelve Weeks EndedTwenty-Six Weeks EndedTwenty-Four Weeks Ended
July 1, 2013June 18, 2012July 1, 2013June 18, 2012
(In thousands, except per share data)
Net income (loss) - GAAP $ (2,462 ) $ 5,486 $ (277 ) $ 7,371
Adjustments:
Acquisition-related expenses 4,185 - 5,203 -
IPO-related expenses - 1,824 - 1,864
Proposed secondary offering expenses 300 - 300 -
Write-off of debt issuance costs 483 1,054 483 1,054
Nonrecurring recruitment and training expenses 327 - 327 -
Gain on insurance settlements - (217 ) (300 ) (217 )
Income tax effect of adjustments above   (1,860 )   (1,045 )   (2,037 )   (1,061 )
Adjusted net income - non-GAAP $ 973   $ 7,102   $ 3,699   $ 9,011  
 
Weighted average shares outstanding (GAAP)
Basic 25,624 22,136 25,624 20,666
Diluted 25,624 22,137 25,624 20,666
Net income (loss) per share (GAAP)
Basic and diluted $ (0.10 ) $ 0.25 $ (0.01 ) $ 0.36
Pro forma weighted average shares outstanding (non-GAAP)
Basic and diluted (1) 25,624 25,624
Adjusted pro forma net income per share (non-GAAP)
Basic and diluted(1) $ 0.28 $ 0.35
Adjusted net income per share (non-GAAP)
Basic and diluted $ 0.04 $ 0.14
 

(1) Reflects 6.4 million shares of common stock issued in the IPO as if it occurred at the beginning of fiscal year 2012.

Investor Relations
Fitzhugh Taylor
203-682-8261
fitzhugh.taylor@icrinc.com
or
Media Relations
Liz Brady DiTrapano
646-277-1226
liz.brady@icrinc.com

Copyright Business Wire 2013
Add a Comment

News   More...

Securities related to this article
Ignite Restaurant Group Inc View irg Stock Quote
Imvescor Restaurant Group, Inc. View irg Stock Quote
Ignite Restaurant Group Inc View irg Stock Quote
 
Start Premium Trial Register For Free

P F Fund Financial Data (13,000+ funds)
P F Stock Financial Data (7,000+ stocks)
P F Stock and Fund Screeners (basic)
P F Investing Articles and Market Commentary
P F Articles Archive (>30 days)
P F Discuss (dozens of stock, fund, bond, and general bulletin boards)
P F Portfolio Manager (basic)
P F Morningstar Investment Classroom
P F Access Your Portfolio Anytime, Anywhere via Your Mobile Device
P   Morningstar Fund Analyst Reports (full research on 1,700 funds, ETFs, and CEFs)
P   Morningstar Stock Analyst Reports (full research on more than 1,100 stocks)
P   Portfolio Manager (advanced with 10 X-Ray analyses, including recommendations)
P   Portfolio Monitor (monthly and on-demand personalized portfolio statements)
P   Morningstar Proprietary Stock Information (stock star ratings, buy/sell prices, economic moat ratings, and more)
P   Morningstar 5-Star Stock and Fund Favorites & Red Flags eNewsletters
P   Premium Stock and Fund Screeners (advanced with nearly infinite ways to find the best securities for you)
P   Discounts on Morningstar newsletters, books, seminars, and more

Sign-up to Morningstar


Basic Access

Articles and Videos
Morningstar video reports, articles, data, and tools. Dig into our lineup of e-newsletters and investing classroom courses outlining sensible strategies for maximizing your investments.
Morningstar Discuss
Follow the buzz on individual stocks or fund families. Plus, read the latest posts from Morningstar members and analysts.
Portfolio Manager
Track your investments and watch lists with our Portfolio Manager. Customize your view with our comprehensive stock, fund, and ETF data.

Access these features and more when you sign up for Free Membership.
Join Morningstar today. It's Free.

Unlimited Access

Analyst Research
Gather in-depth, actionable insight on over 3,700 stock and mutual funds covered by Morningstar analysts. View our mutual fund Analyst Reports favored by professionals, savvy experienced investors, and new investors researching options for retirement savings, college plans, or other investment needs.
Portfolio X-Ray®
Ensure your portfolio is positioned exactly how you want with Morningstar's X-Ray Interpreter and Stock Intersection tools. A Barron's "Best of the Web" award winner for five years running, X-Ray Interpreter goes under the hood of your portfolio to provide a useful allocation, sector, and geographic analysis. And you can discover how much of a stock you really own, individually and through mutual funds, with Stock Intersection.
Investment Picks
Find new 5-star stocks (greatly undervalued companies) to consider daily. Our 5-star stock rating is a proven winner, consistently beating benchmarks like the S&P 500. Plus, browse our Fund Analyst Picks and Stewardship Grades to find shareholder-friendly mutual funds that are poised for outperformance.
Portfolio Monitor
Get a clear view of your investments with personalized reports about your portfolio. Receive monthly statements and generate reports on-demand to help you stay on track to meet your investment goals.

Access these features and more when you sign up for Premium Membership.
Start your free 14-day trial today online
Your subscription may be tax deductible. Please contact your tax advisor.

Content Partners
Morningstar - - Ignite Restaurant Group Reports Second Quarter 2013 Financial Results
Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol |  Title Star Rating |  Category |  Total Assets |  Top Holdings |  Top Sectors |  Symbol |  Name Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol / Ticker |  Title Star Rating |  Category |  Total Assets |  Symbol / Ticker |  Name Title |  Date |  Author |  Collection |  Popularity |  Interest Title |  Date |  Company |  Symbol |  Interest |  Popularity Title |  Date |  Company |  Symbol |  Interest |  Popularity Title |  Date |  Author |  Collection |  Interest |  Popularity

Previous: Ignite Restaurant Group Reports Fourth Quarter 2013 Financial Results  |  Next: Ignite Restaurant Group Reports Third Quarter 2013 Financial Results